How to make a household budget in five steps
19 September 2025 · Debt Review Centre
A useful household budget shows what comes in, what must go out and what remains. Start with recent statements rather than estimates from memory, then check the plan against your actual spending.
1. Choose a clear purpose
Decide what you need the budget to do. You might want to cover every bill on time, build an emergency fund or pay extra towards a debt. Write down the amount you can work towards without leaving essential expenses unpaid.
2. List your take-home income
Use the amount that reaches your bank account after deductions. Include reliable household contributions and other income. If your earnings vary, look at several months of records and plan for a lower-income month as well as an average one. Do not treat an uncertain bonus as money already available.
3. List expenses and debt payments
Work through your statements and separate essential living costs, credit repayments and spending you can adjust. Include irregular expenses such as school costs, annual renewals and vehicle maintenance. Set aside a monthly amount for them where possible.
| Budget line | Planned amount | Actual amount |
|---|---|---|
| Take-home household income | R | R |
| Housing, utilities and food | R | R |
| Transport, health and other essentials | R | R |
| Required debt repayments | R | R |
| Irregular expenses and savings | R | R |
| Optional spending | R | R |
| Money remaining | R | R |
4. Check whether the plan balances
Subtract spending and required repayments from your take-home income. The household affordability calculator can help you organise this calculation.
If the result is positive, decide how to allocate that money. If it is negative, check whether spending can realistically be reduced. A budget that depends on skipping necessities or using more credit each month needs a closer assessment.
If you can maintain your minimum repayments and have extra money available, read about choosing a debt repayment order. If essential expenses and debt payments remain unaffordable, read the debt review eligibility guide.
5. Compare the plan with actual spending
Choose a regular time to review the budget. A notebook or spreadsheet is enough. Record what you spent, explain large differences and adjust the next month before the bills fall due.
For categories that are easy to overspend, such as entertainment, use a separate spending limit or envelope. Involve the people who share the household budget so everyone understands the limits and priorities.
If you need help putting the figures together, explore DRC’s budgeting support or prepare with the free assessment checklist.
Related questions and next steps
- Help with your household budget
Discuss the numbers if you need help putting a budget together.
- Paying off debt yourself
Prepare a budget and choose a repayment order you can maintain.
- Planning a holiday-season budget
Set aside ordinary expenses before deciding what to spend on celebrations.
- Household affordability
See what remains after living costs and debt payments.
See what your monthly payment could look like
Use the free calculator to enter your income, expenses, and debt payments. You will get an immediate estimate of your possible debt review payment and monthly savings. It is not an application.